Which of the Following Indicators Provides the Clearest Indication That

question 88

Multiple Choice

Which of the following indicators provides the clearest indication that an economy is experiencing deflation?

• A) A decrease in the unemployment rate
• B) A decrease in GDP
• C) An increase in the PPI
• D) A decrease in the CPI

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Definitions:

Necessities

Basic needs essential for maintaining life, such as food, water, shelter, and clothing, which take precedence over other types of spending.

Elasticity Coefficient

A measure used to show the responsiveness of the quantity demanded or supplied to a change in one of its determinants, like price or income.

Supply

A schedule or curve that shows the various amounts of a product that producers are willing and able to make available for sale at each of a series of possible prices during a specified period of time.

Elastic

A characteristic of a good or service indicating that its quantity demanded or supplied changes significantly when there is a change in price.